The conflict between Coinbase, a leading cryptocurrency exchange, and the US Securities and Exchange Commission (SEC) has escalated to a higher degree, with Coinbase recently initiating a writ of mandamus against the regulatory entity. This legal step comes after several months of disagreements regarding the necessity of transparent regulations and guidelines for crypto enterprises in the United States.
Coinbase’s action to file the writ of mandamus follows closely after the SEC expressed its lack of urgency in addressing Coinbase’s request for regulatory clarity, dismissing the claims as “baseless.” The writ of mandamus is a legal recourse that entails a formal petition to compel a government agency to fulfill its legal obligations as mandated by statutes.
In its filing, Coinbase emphasized the SEC’s intention to persist in its enforcement actions targeting the crypto industry, specifically addressing the same subjects raised in the cryptocurrency exchange petition while disregarding the petition itself. This approach mirrors the SEC’s previous handling of rulemaking petitions related to digital assets.
Coinbase Seeks Mandamus To Compel Sec’s Response On Regulatory Clarity
If the SEC rejects Coinbase’s appeal, it could be forced to address the issue of digital asset regulation through a mandamus – a court order requiring government compliance. Exchange claims that the SEC has been unresponsive, failing to offer clear rules despite the exchange’s first request and subsequent court pressure.
Additionally, the cryptocurrency exchange highlighted the SEC’s ongoing enforcement campaign as a notable shift from its previous position of applying securities laws to digital assets. According to the California-based exchange, the SEC now claims the power to pursue enforcement actions against the industry indefinitely, based on undisclosed new criteria.
Moreover, Popolar exchange maintains that if the petition is rejected, the court should oversee the SEC’s activities, urging the commission to advance its efforts in establishing regulations. Seeking a writ of mandamus would require the SEC to respond within seven days.
The legal representatives representing Coinbase concluded by stating:
The Court should retain jurisdiction and order the SEC to explain its delay to date, state when it will respond, and provide progress reports to the Court.
The result of this legal dispute carries substantial consequences for the regulatory framework of the cryptocurrency sector in the United States. If Coinbase achieves a favorable outcome, it could establish a path toward greater transparency and regulatory stability, providing crypto businesses with a more secure and predictable operating environment. Conversely, if Coinbase’s concerns are dismissed or left unaddressed for an extended period, it could perpetuate the current uncertainty and impede the industry’s progress.
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